Did that take the better part of a second? There, student loan debt just grew by $2,726. According to Marketwatch, that around three-thousand dollar number, accumulating every second, is part of about $1.3 trillion dollars graduates now owe for their college educations.

The debt can be a lifelong leech. What would life be like without it? This is the question millions of people are asking. We pursue a career because we’re passionate about something. But plenty of us also pursue a career, and get a degree, because we want to make good money. Paradoxically, this pursuit of good money means we owe more than ever before.

Don’t despair. This is a chance to tackle a very real problem, a problem shared by 40 million Americans and counting. You’re not alone here. Plenty of us feel this is out of control. Think of taking control as a continuing education process. You’ve got to own the debt, corral it, and work with it until it’s out of your life.

It will be easier to sort this out if all of your daily finances are in order. Here are the steps:

Organize by using free services – Mint and Personal Capital are both tools for putting all of your accounts, including bank accounts, investment accounts, and student loan accounts, onto a single dashboard where you can see them

Do autopay – Your budget should be setup so your loan repayment is part of basic expenses that don’t change; tell your bank to autopay basic expenses online each month and make sure you deposit enough from each check to cover the autopayment. Setup overdraft protection in case something goes wrong, set up auto-debit directly with your lender, and receive a twenty-five cent discount on your interest payment

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Audit yourself– At tax time each year, check your accounts thoroughly to make sure nothing is amiss

Public Service Loan Forgiveness – To qualify for PSLF, you must work for a non-profit, the government, or “a private company that provides public services”; also, your loan has to be from the federal Direct Loan Program, and you have to have already made 120 payments; check out the hack on income-based payment plans for info on how you can pay nothing per month but have it qualify as payment

State forgiveness– 45 states offer forgiveness; the majority of these programs also require you to have a job in public service. Go here to find information state-by-state

Perkins Loan cancellation – This also applies to public service individuals who received a Perkins Loan; in particular, teachers who work in any of the teacher shortage areas, or at low-income schools, qualify. For the full list on who’s eligible and the amount that could be forgiven, go here.

Military Forgiveness – Military personnel qualify for the PSLF, the Perkins cancellation, the National Defense Student Loan Discharge, and the Veteran’s Total and Permanent Disability (TPD) Discharge, as well as a number of deferments and repayment programs

Why making larger payments makes sense – simply paying $200 more than the minimum payment per month saves you $2,400 on interest, and you pay off the loan 4 years earlier

The value of the right mindset – listing the reasons why you want to live frugally, in order to pay off your debt quickly, will help prepare you for the challenge of tightening the belt

How to create a spending plan – looking at your last three months of bank statements will help give you an idea of your average expenses

How to track spending – you can create a spreadsheet with each expenditure listed, and phone- reminders of when to make payments

Creating an emergency fund – start with $1000 and then try to save 3 to 6 months’ worth of expenses

Taking on an extra gig– the gig economy offers a ton of options, such as driving for Uber, and according to Fabio Rosati of Upwork, this economy contributes “more than $700 billion to our national economy”. Why not take advantage of the options?

Creating your repayment plan – The National Student Loan Data System will pull up all your loan services, and from there you can decide on a “Snowball Method” or an “Avalanche Method” of repayment

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Looking at alternative repayment plans – Loan consolidation, deferment, and forbearance are all options available to you

Getting a support system – having someone there to keep you accountable is priceless

Rewarding yourself – finding small ways to do this will help keep you on the payment path; after all, man cannot live on bread alone

In December of 2015 the federal Revised Pay As You Earn (REPAYE) program will go into effect. This program is more lenient than any of the income-based programs that have been available. Under this program, if you received a Direct Loan, you’ll pay no more than 10% of your discretionary income. “Discretionary” income is Adjusted Gross Income above 150% of the poverty level for your household.

If you absolutely have no job and no income, you’ll still qualify for this plan—unless you’ve defaulted on your loan. You could end up paying nothing per month if 10% of your income is nothing. But interest would still accrue.

You can also consolidate your Federal Family Education Loan (FFEL) and Perkins Loan into a Direct Consolidated Loan, which would then be eligible for REPAYE.

A caveat: you can’t consolidate private and public loans. Consolidating your state and federal loans will allow you to pay less per month, but once again there’s the issue of interest adding up as you’re making minimum payments. Still, consolidation will simplify the situation, giving you one payment at a set interest rate. And thanks to REPAYE, that payment could be very low, which will help a great deal if you’re strapped for cash right now.

Look at the information your lender has sent you. Anything helps, and you can reduce your taxable income by up to $2,500 if you’ve been paying on the interest for your loans. If you qualify for deferment or forbearance (meaning you wouldn’t have to pay on the principal of your loan for a certain period of time), try scraping together money to pay on the interest, and then look into deducting what you pay from your taxes.

Here, you can sign up to volunteer and get crowdsourced money to go towards paying your student loans. SponsorChange is another site of this same nature. Make sure to familiarize yourself completely with these opportunities before you take them.

8. Volunteer elsewhere

AmeriCorps, VISTA (Volunteers In Service To America), Peace Corps, Teach for America, and National Health Service Corps offer forms of student loan forgiveness or reimbursements.

Be careful with a credit card; it’s the same as taking on more loans. But if you are confident in your budgeting skills, a card such as UPromise is specifically designed to give you good cash-back rewards from your purchases, which can then go directly toward paying off your debt. You’re going to be making purchases anyhow, and this is a chance to make money from them. But you have to be highly disciplined.

10. Consider refinancing

Right now this will lower your interest rate. But once again, be careful. Refinancing will put you in private loan territory, where none of the options (listed above) for a federal or state loan apply. Don’t refinance unless you’ve got a good job, are sure you can meet the principal on your loan, and are simply looking to pay less interest. But be aware that interest rate could go up.

There are direct-debit discounts, on-time payment discounts, graduation credits, and a degree of forgiveness available from certain lenders. The Department of Education also offers two types of discounts.

How to Set Financial Goals and Actually Meet Them

Finances can push anyone to the point of extreme anxiety and worry. Easier said than done, planning finances is not an egg meant for everyone’s basket. And that’s why most of us are often living pay check to pay check. But did anyone tell you that it is actually not a tough task to meet your financial goals?

In this article, we will explore ways on how to set financial goals and then actually meet them with ease.

Table of Contents

5 Steps to Set Financial Goals

Though setting financial goals might seem to be a daunting task but if one has the will and clarity of thought, it is rather easy. Try using these steps:

1. Be Clear About the Objectives

Any goal (let alone financial) without a clear objective is nothing more than a pipe dream. And this couldn’t be more true for financial matters.

It is often said that savings is nothing but deferred consumption. Therefore if you are saving today, then you should be crystal clear about what it is for. It could be anything like kid’s education, retirement, marriage, that dream vacation, fancy car etc.

Once the objective is clear, put a monetary value to that objective and the time frame. The important point at this step of goal setting is to list all the objectives, however small they may be, that you foresee in the future and put a value to it.

2. Keep Them Realistic

It’s good to be an optimistic person but being a pollyanna is not desirable. Similarly, while it might be a good thing to keep your financial goals a bit aggressive, going out of the line will definitely hurt your chances of achieving them.

It’s important that you keep your goals realistic in nature for it will help you stay the course and keep you motivated throughout the journey.

3. Account for Inflation

Ronald Reagan once said – “Inflation is as violent as a mugger, as frightening as an armed robber and as deadly as a hitman”. And this quote sums up the best what inflation could do your financial goals.

Therefore account for inflation whenever you are putting a monetary value to a financial objective that is far away in the future.

For example, if one of your financial goal is your son’s college education, which is 15 years hence, then inflation would increase the monetary burden by more than 50% if inflation is mere 3%. So always account for inflation.

4. Short Term vs Long Term

Just like every calorie is not the same, the approach towards achieving every financial goal will not be the same. It is important to bifurcate goals in short term and long term.

As a rule of thumb, any financial goal, which is due in next 3 years should be termed as short term goal. Any longer duration goals are to be classified as long term goals. This bifurcation of goals into short term vs long term will help in choosing the right investment instrument to achieve them.

More on this later when we talk about how to achieve financial goals.

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5. To Each to His Own

The journey of setting financial goals is an individualistic affair i.e. your goals are your own goals and are determined by your want to achieve them. A lot of times we get on the bandwagon of goal setting only to realize later on that it was not meant for us.

It is important that your goals are actually your goals and not inspired by someone else. Take a hard look at this step at all the goals you’ve set for after this step, you will be on the way to achieve them.

By now, you would be ready with your financial goals, now it’s time to go all out and achieve them.

11 Ways to Achieve Your Financial Goals

Whenever we talk about chasing any financial goal, it is usually a 2 step process –

Ensuring healthy savings

Making smart investments

You will need to save enough; and invest those savings wisely so that they grow over a period of time to help you achieve goals. So let’s get down to ensuring healthy savings.

Ensuring Healthy Savings

Self realization is the best form of realisation and unless you decide what your current financial position is, you aren’t heading anywhere.

This is the focal point from where you start your journey of achieving financial goals.

1. Track Expenses

The first and the foremost thing to be done is to track your monthly expenses. Use any of the expense tracking mobile apps to record your expenses. Once you start doing it diligently, you would be surprised to see how small expenses add up to a sizeable amount.

Also categorize those expenses into different bucket so that you know which bucket is eating the most of your pay check. This record keeping will pave the way for cutting down on un-wanted expenses and pump up your savings rate.

2. Pay Yourself First

Generally, savings come after all the expenses have been taken care of. This is a classical mistake which almost everyone of us do. We pay ourselves last!

Ideally, this should be planned upside down. We should be paying ourselves first and then to the world i.e. we should be taking out the planned saving amount first and then manage all the expenses from the rest.

The best way to actually implement is to put the savings on automatic mode i.e. money flowing automatically into different financial instruments (for example – mutual funds, retirement corpus etc) every month.

Taking the automatic route will make us lose control of our money and hence will compel us to manage in what’s left with us thereby increasing the savings rate.

3. Make a Plan and Vow to Stick with It

Budgeting is the best to get around the uncertainty that financial plans always pose. Decide in advance how spending has to be made.

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Nowadays, several money management apps and wallets can help you do this automatically. It’s easy and who knows, you may just end up doing what people fail to do.

At first, you may not be able to stick to your plans completely but don’t let that become a reason why you stop budgeting entirely.

Make use of technology solutions you like. Explore options and alternatives that let you make use of the available wallet options and choose the one that suits you the most. In time, you will get accustomed to making use of these solutions.

You will find that they make it simpler for you to follow your plan, which would have been difficult otherwise.

4. Rise Again Even If You Fall

Let’s be realistic. It’s not like the world will come to an end if you made one mistake. This isn’t called leniency but discipline.

If you fail to meet your budget for a month, don’t give up the entire effort just like that. Instead, start again.

Remember that flexible plans are the most realistic plans. So go forward and try to follow your financial goals as planned but if for some reason, the plan gets out of hand for you, do not give up on it just yet. This has a lot to do with your psychology rather than any material commitment.

All you have to do is to stay on the road and vow to stay on it, no matter how much you fall down.

5. Make Savings a Habit and Not a Goal

In the book Nudge, authors Richard Thaler and Cass Sunstein advocate that in order to achieve any goal, it should be broken down into habits since habits are more intuitive for people to adapt to.

Make Savings a habit rather than a goal. While it might seem to be counter intuitive to many but there are some deft ways of doing it. For example:

Always eat out (if at all) during weekdays rather than weekends. Usually weekends are expensive. Make it a habit and you would in turn be saving a great deal.

If you are travelling buff, try to travel during off season. Your outlay will be much less.

If you go out for shopping, always look out for coupons and see where can you get the best deal.

So the key point is to imbibe the action that results in savings rather than on the savings itself, which is the outcome. Focusing on the outcome will bring out the feeling of sacrifice which will be harder to sustain over a period of time.

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6. Talk About It

Sticking to the saving schedule (to achieve financial goals) is not an easy journey. There will be many distractions from those who are not aligned with your mission. And it would be rather easy to lose the grip over your discipline.

Therefore in order to stay the course, it is advisable that you keep yourself surrounded with people who are also on the same bandwagon. Daily discussions with them will keep you motivated to move forward.

7. Maintain a Journal

For some people, writing helps a great deal in making sure that they achieve what they plan.

So if you are one of them, maintain a proper journal, where you write down your goals and also jot down the extent to which you managed to meet them. This will help you in reviewing how far you have come and which goals you have met.

Use this journal to write down all essential points such as your short term, mid term and long term goals, your current sources of income, your regular expenses which you are aware of and any committed expenses which are of recurring nature.

When you have a written commitment on paper, you are going to feel more energised to follow the plan and stick to it. Moreover, it is going to be a lot more easier for you to follow you and track your progress.

At this point, you should be ready with your financial goals and would be doing brilliantly with savings; now it’s time to talk about the big daddy – Investments.

Making Smart Investments

Savings by themselves don’t take anyone too far. However savings when invested wisely can do wonders and we are at that stage where we will talk about making smart investments.

8. Consult a Financial Advisor

Investments doesn’t come naturally to most of us therefore rather than dabbling with it ourselves, it is wise to consult a financial advisor.

Talk to him/her about your financial goals and savings and then seek advice for the best investment instruments to achieve your goals.

9. Choose Your Investment Instrument Wisely

Though your financial advisor will suggest the best investment instruments, it doesn’t hurt to know a bit about them.

Just like “no one is born a criminal”, no investment instrument is bad or good. It is the application of that instrument that makes all the difference.

Do you remember we talked about bifurcating financial goals in short term and long term?

It is here where that classification will help.

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So as a general rule, for all your short term financial goals, choose an investment instrument that has debt nature for example fixed deposits, debt mutual funds etc. The reason for going for debt instruments is that chances of capital loss is less as compared to equity instruments.

10. Compounding Is the Eighth Wonder

Einstein once remarked about compounding,

Compound Interest is the eighth wonder of the world. He who understands it, earns it… He who doesn’t… Pays it.

So make friends with this wonder kid. And sooner you become friends with it, quicker you will reach closer to your financial goals.

Start investing early so that time is on your side to help you bear the fruits of compounding.

11. Measure, Measure, Measure

All of us do good when it comes to earning more per month but fail miserably when it comes to measuring the investments; taking stock of how our investments are doing.

If there is one single step where everything (so far) can go wrong, it is at this step – Measuring the Progress.

If we don’t measure the progress timely, then we would be shooting in the dark. We wouldn’t know if our saving rate is appropriate or not; whether financial advisor is doing a decent job; whether we are moving closer to our target or not.

Do measure everything. If you can’t measure it all yourself, ask your financial advisor to do it for you. But do it!

The Bottom Line

This completes the list of tips for you to set financial goals and actually achieve them with not so great difficulty.

As you can see, all it requires is discipline. But guess that’s the most difficult part!